Chancellor to shift 60,000 civil servants

Plans to shift up to 60,000 civil servants out of London are to be unveiled today in the latest bid to ease the strain on government spending.

The move, which could save as much as £2 billion over the years but which could be unpopular among many of those involved, is a critical component of Gordon Brown's Budget in two days' time.

But the Chancellor was under renewed fire today amid charges that this week's package hides a tax timebomb - with hefty rises to come after the election expected next year.

Suspicions were fuelled after Labour's chairman, Ian McCartney, refused to rule out tax increases if Labour gains a new term of power.

And former Treasury minister Geoffrey Robinson said it was simply not "real world" for a party to go into an election campaign admitting taxes would climb if it won.

The big migration from Whitehall is spelled out in a Governmentcommissioned report from Sir Michael Lyons.

He calls for 20,000 jobs to be shifted out of London and the South-East over the next five years, rising to 60,000 over the next decade and a half at a saving of £2 billion.

The sting in the tail is that, for the first time, there could be real pressure for the change to extend further up the senior Whitehall ranks.

The backers of the plan, including the Chancellor, point out that with 240,000 posts based in London and the South-East, there is plenty of room for savings and that new technology makes it easier for senior civil servants to move and still keep in close touch with the centre.

Mr Brown, with an election looming, was widely predicted to steer clear of obvious large-scale tax rises in the Budget. But he was under heavy pressure to find revenue wherever possible to close a gap in his finances claimed by the Tories and others to amount to some £10 billion.

One planned money raiser was an unprecedented clampdown on tax avoidance, given added bite by plans to merge the Inland Revenue and Customs and Excise into the most powerful tax-grabbing organisation Britain has ever experienced.

The CBI and others were already warning the Chancellor against moves to change the rules retrospectively to catch thousands in the tax net for actions to protect benefits for their children or other legitimate arrangements suddenly thrust outside the law.

Plans were also due to be confirmed today to raise the minimum wage by well above the inflation rate as well as bringing in a minimum wage for the first time for 16- and 17-year-olds in a move set to please Mr Brown's Old Labour supporters.

Meanwhile, there have been suggestions the Budget will see another increase in stamp duty, currently three per cent on the sale of properties worth between £250,000 and £500,000, and four per cent on properties above that level. Putting an extra per cent on the top rate would raise another £400 million for the Treasury.